YouTube 02/12/2020 Question Answer

[Youtube 02/12/2020 Question Answer] CLEC Investment and Financial Management Education Channel Blog Post Date: February 15, 2020

Hello teacher, thank you for sharing the video to let us know that the technology industry has great future prospects. After watching it, I have questions about asset allocation and investment risks that I would like to ask you.

1: You suggest that employed people keep cash for half a year's living expenses, retired people keep cash for three years, and invest the remaining assets in QQQ and SP500 to participate in the market for the long term. If a technology bubble occurs in a decade or so, will retired people be able to survive the crisis without affecting their quality of life?

A: What we worry about is hitting a bubble as soon as we retire, which is the riskiest situation.

If we encounter a bubble 10 years after retirement, the risk is not high at all. In 10 years, our assets may increase three to six times. Even if they fall by half, they will still be more than our current funds.

The following is a previous YOUTUBE video explaining fund management and risks after retirement. Provide your reference!

The first investment lesson in 2019 (2/2) Risk control and retirement account withdrawals and arrangements. The content is newly revised. 01/05/2019 CLEC Club (The video starts at the 25-minute mark and talks about retirement accounts and capital withdrawal risks.)

[https://youtu.be/AUCZdDWsW-U](https://l.facebook.com/l.php?

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Investment and financial management information (8) Market sequence risk, how can retirees resist the risk of the market falling first and then rising. CLEC 201910/03

[https://youtu.be/J4BNqEt6NZw](https://l.facebook.com/l.php?

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2: Continuing from the previous question, if I understand correctly, in this situation of low interest rates and increased bond risks, do you have any recommended asset allocation?

Answer: Under the circumstances of low interest rates, real assets are relatively good investments, and stock indexes are the safest and least troublesome investment method. There are no management fees, no sales, and no tax problems. As for asset allocation, I suggest that young people who are still working can invest 80% to 90% in index funds (or retain half a year's living expenses.). Retired people can invest 70% to 80% in index funds (or keep two to three years of living expenses, and the rest of the funds can be fully invested in index funds.). The remaining cash positions are to buy currency funds, time deposits, and short-term bonds.

3: Your video mentioned that the return rate of high-yield bonds and REITS is lower than that of SP500. Please tell me the difference in return rate and risk between these high-dividend investment products and SP500 under the condition of reinvesting dividends.

Answer: The video mentions a comparison with the index fund QQQ. Generally, the share price returns of high-dividend REITs usually are not high, and REITs with high share price returns usually do not have high dividends.

Generally calculated return on investment = annualized return on stock price + dividend yield

I have calculated the return on investment of most REITs (share price return plus dividend yield) and still do not beat QQQ.

4: You mentioned that many people simply don’t know how much risk they can take. I totally agree with this. I would like to ask what are the risks of the investment products in the video? How to make a simple estimate? Let the average person understand the risk of their own asset allocation? Regarding the above question, if you, teacher, are unable to explain it clearly due to space constraints, can you provide relevant information URLs so that I can research on my own? Thanks.Answer: The risk that most people talk about is the risk of market decline, so everyone must think about how much your assets can fall at most. Here are some information and reference books for your reference. The book will mention that the ratio of investing in stocks and bonds can push back the highest decline.

https://i2.wp.com/....../AAAAAAAAInE/ATJRGUZXgjk/s1600/1.jpg

[Basic Teaching] Financial and Business Concepts - Investment Myth 1 (Bonds are safer than stocks?) | | Chasing the sun, Gucci invests in US stocks and enjoys life

[https://www.guccidgi.com/2015/01/基礎教學財商觀念-投資的迷思1債券比股票安全](https://www.guccidgi.com/2015/01/%E5%9F%BA%E7%A4%8E%E6%95%99%E5%AD%B8%E8%B2%A1%E5%95%86%E8%A7%80%E5%BF%B5-%E6%8A%95%E8%B3%87%E7%9A%84%E8%BF%B7%E6%80%9D1%E5%82%B5%E5%88%B8%E6%AF%94%E8%82%A1%E7%A5%A8%E5%AE%89%E5%85%A8?

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I suggest you read two books, The Canon of Retail Investment Funds, and Investment Fund Rate.

We also have a book list on Facebook, the link below is for your reference

Investment books worth reading:

[https://www.facebook.com/794648900700097/posts/1091080581056926?s=100012219129327&sfns=mo](https://www.facebook.com/California.Life.Enrichment.Club/posts/pfbid02ehRiCfpkWUeY9TLr4cZ1DC76G6v9tr7zCBzeQpPDT5zpA2d2eUGtbBJPYUEF3Gdil?

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Thank you for your message!